Property market still lucrative, experts say

By Crystal Hsu / STAFF REPORTER

Recent hikes in assessed land values in the Greater Taipei area may not discourage real-estate speculation because the significant gap between government-assessed values and market prices still makes the property market a lucrative investment, experts said.

Earlier this month, Taipei City and Taipei County, which account for half of the nation’s housing transactions, raised their assessed land value by 15.33 percent and 12.08 percent, respectively, marking the biggest increases in almost two decades.

The revisions, effective next year, will subject real-estate properties to higher land value -increment levies on ownership transfers, but may not impose unbearable costs on real-estate investments, said Chang Chin-oh (張金鶚), land economics professor at National Cheng-chih University.

The current assessed land value still lags behind the market price by between 30 percent and 50 percent, depending on the location, which makes the actual tax increase tolerable, said Chang, a vocal advocate of implementing drastic tightening measures to cool the property sector.

“The government can fix the issue by requiring real-estate agencies to declare the real prices on all transactions, thus making property transfers more transparent and accountable,” Chang said by telephone.

The academic said housing prices nationwide have jumped in recent years, but some record deals reported in the press have been exaggerated.

A recent survey by the Chinese-language Housing Monthly (住展雜誌) shows home prices gained 30 percent and 17.6 percent in Taipei County and Taipei City respectively over the last three years.

Housing values in Sinjhuang (新莊) top other areas at 78 percent, thanks to re-zoning ordinances and the extension of the mass rapid transit system, said Ni Tzu-jen (倪子仁), spokesman for the magazine.

Chang said construction firms and real-estate agencies tend to boast to promote sales, and the lack of transparency leaves homebuyers vulnerable to the hype.

The Ministry of Interior, which has control over land use, could help level the field by requiring details for each property deal, Chang said.

Chuang Meng-han (莊孟翰), a professor of industrial economics at Tamkang University, said the central bank could also help by tightening land and construction loans.

The bank should take further steps to check housing prices at its policy meeting later this month now that the selective credit control in June has proved futile, Chuang said by telephone.

Sharp competition last week for a 50-year lease to develop a -government plot of land near Pacific Sogo Department Store (太平洋崇光百貨) showed the housing fever spreading to surface rights contests, Chuang said.

Chuang linked central bank inaction in September to political concerns ahead of the special municipality elections.

“The concern is no longer warranted after the elections left the landscape unchanged in November,” he said.

The Ministry of Finance can also lend a helping hand by imposing heavy taxes on short-term home transfers in both pre-sale and second-hand markets, Chuang said, adding that most ordinary people could not afford short-term transfers.